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Halcon Resources Corp. Message Board

  • valueman60 valueman60 Mar 7, 2014 11:01 AM Flag

    Very interesting information


    being dug out about the TMS JV
    The deal supposedly done, weeks ago. But it did not close , and is still being "negotiated".
    Problem is HK, being in the extremely poor financial position it is, the jv partner knows that and is demanding too much to grant the carry . problem with that is that even if HK is successful in the TMS, and that is not by any means certain, they won't profit that much from it.
    Fact, even without having to give more of the profits (working interest ) to a JV partner, the financials on the TMS as it stands now has a very low WI of 66% and a high royalty payment of 22% , so the NRI (net revenue interest) is only 51%!!! see pg38 of latest presentation. That means HK will only get 51 % of any revenue generated by TMS wells, Hard to move the needle with that burden. And if they add a JV partner at UNFAVORABLE terms, even lower. It means even with drilling success, incrementally it does not move the needle as much.
    Looking at the other core properties paints a similar picture. We know HK is allocating more capex to the "most economic" areas, the best area in the Williston (FBIR=fortberthold) has a lower NRI of only 55% versus the 65% in the Williams county less economic area. And in El Halcon, NRI is a paltry 53% (pg21) due to high 25%royalty etc. So the conclusions is that even with very good drilling result, HK will have a very difficult road ahead to move the needle , given the high debt load, and high sharecount etc.
    Facts, not opinion. Those who study things understand why the shareprice of HK is where it is.
    The haters can now try to divert from the truth by the usual name calling etc, but won't change the truth of this post.

    This topic is deleted.
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    • Any JV is for the TMS, not HK. HK's leverage position, as you put it, comes from the quality of the play and their ability to execute on it, not their debt level, the quality of the TP in the porta-pottie, or the price of tea in China. That has to be proven first. What idiot would buy a pig in a poke? And they will dance with the devil if the devil can get it out of the ground.

      If proven a good play, HK will have suitors. (options) But terms (leverage) will be industry standard which is why they have a standard. A poor play is sold and HK keeps the proceeds.

      My speculation is that if oil prices stay at the high end of their hedged range ( $100 ) they won't seek a partner. If towards the low end as most " experts " predict with little hope of recovery, ( $90 ) then they take a partner.

      The rest of the diatribe is fairly accurate .... and standard.

      Sentiment: Buy

    • yeah that's why its called a JV

    • Those of us that actually are WI partners in the E&P business know how the WI, ORRI, NRI, etc work. We don't need you to educate us. We also know that you don't become self funding unless you drill, AND DRILL ALOT. Sometimes you have to be leveraged to do that. It's all about the beast feeding itself rather than the company feeding the beast. Just stick to what you seem to be best at, crunching numbers. Everyone loves a great accountant anyway.

    • There you go haggling again. Get them to sell you more at rock bottom price. I got to say, you are good at this.

    • Go away you little knat. freakin crybaby

    • so sell and take your loss... if you even own a share. Its Friday you are bearish... on Monday are you neutral or bullish I can't keep track of your flip flopping

    • No name calling, just the facts.
      Fact #1: Analysts at Barclays raised their target price on HK today.
      Fact #2: Those analysts have more resources and are much smarter than you.
      Fact #3: None of those analysts have ever posted a FAKE cusip # on a message board to mislead readers.
      Fact #4: You are a pompus, lonely little flea.
      Anyone else have any facts that I may have missed?

      Sentiment: Strong Buy

    • you are so stupid, and blantantly dishonest--you talk about things like NRI that you have no idea about... a 22% royalty is not high, in fact in most places in Louisiana, and Texas(in fact anywhere close to good production), a 25% royalty is the norm.. Secondly, that 51% is a NET REVENUE INTEREST--which means after royalty. That has absoilutely nothing to do with any "carried interest" in the deal--IE the promote.... which would DRASTICALLY MOVE THE NEEDLE. You still dont get it... IF they drill it themselves, your facts are correct(but as usual you twist the truth), but if it's sold as a JV, then HK will be carried(some of their costs paid for in some percentage) and the ROI dramatically increases depending upon the carry. In this case, it appears the JV partner, will own a 1/3 WI (33%), and HK will own 67% WI and will be carried probably for no less than 25% of its costs in the acreage and drilling up to some predetermined amount. Of course, you wouldnt know that as you are a dumb--#$%$......
      You are such a fraud.... its just that simple....

      Sentiment: Strong Buy

      • 1 Reply to oilman2345
      • thats the same as saying i own 100% WI, but only 75% NRI ....
        which is common after royalty... lol
        ooohh come on and take the severance taxes out too... thats 4.6% in Texas
        The baseline Texas severance tax on oil and gas is:
        • Gas severance tax = 7.5% of market value of gas produced and saved
        •Oil severance tax = 4.6% of market value of oil produced
        •Condensate tax = 4.6% of market value

        what a fraud.......and kotex wrapper you are

        Sentiment: Strong Buy

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